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Last week, in this space, I discussed the amenities contained within your commercial real estate that do not “move the meter” with buyers – AKA, buyers don’t care and won’t pay a premium for the benefit.
You may wonder – are there, in fact, features that will create a greater worth for the real estate?
In no particular order they are:
Extra land. Generally, a greater price will be paid if extra land exists. In our congested county, extra land is a rarity. However, I must define “extra”. We use the term excess and surplus interchangeably – even though we shouldn’t – to describe extra land. You see, if the extra land doesn’t serve the use contained, but cannot be separated and sold, the land is actually surplus land. In this instance, an occupant who had a large outside storage need would ante up. If the surplus could house additional building square footage – voila! In the absence of these two circumstances, no increase – because fronting cash for future advantage is costly. Conversely, if the extra land was excess – I can separate it and sell it – eureka!
Warehouse ceiling height. Rents and sales prices are quoted in floor area square footage. Ignored is the cube space that exists in a warehouse. I wrote about that here. In effect, if the warehouse ceilings are higher than what’s normally found in the market – an occupant can stack their goods higher and benefit from space for which they aren’t being charged.
Loading doors that allow large trucks. Large trucks cannot make deliveries to a warehouse door that is lower than the truck bed – without a lot of excess material handling. Therefore, buildings equipped with “truck high loading doors” are valuable. If the warehouse ceiling also allows high stacking – you’ve got a duo in higher demand than Batman and Robin!
Fenced outside staging or storage areas. A typical manufacturer can benefit from outside storage of raw materials or finished goods. Logistics companies enjoy fenced and secured parking for their trailers. If your building has either, plan on jacking up that asking price.
Heavy electrical service. Much is involved with upgrading an electrical service into an industrial building – permitting, capacity, SCE studies, cost, time delays. If you own a building that has survived the agony of adding power, congratulations! This is a feature that will sell!
Fiber optic feeds. Many of the buildings in Orange County were built before the digital age. Consequently, few of them are wired for today’s mass use of on-line commerce. Akin to the description of heavy electrical service additions, adding fiber suffers the same challenges and the same appreciation if the hurdles have been crossed.